Our civilization is locked in the grip of an ideology - CORPORATISM.
An ideology that denies and undermines the legitimacy of individuals as the citizen in a democracy.
The particular imbalance of this ideology leads to a
worship of self-interest and a denial of the public good.
The practical effects on the individual are passivity and conformism in the areas that matter, and non-conformism in the areas that don't.
John Ralston Saul

07 February, 2010

Yaffe interview CORREA - SUCRE vs Dollar

HELEN YAFFE completed her doctoral thesis in the Economic History Department at the London School of Economics, with an ESRC studentship. She then went on to an ESRC Postdoctoral Fellowship at the Institute for the Study of the Americas, University of London and is now a Latin American history Teaching Fellow at University College London. She has worked on a variety of newspapers and publications and has presented papers at conferences and seminars. She has an article in the March 2009 issue of the journal Latin American Perspectives - a special issue commemorating the 50th anniversary of the Cuban Revolution.

12/12/2009 Interview with Ecuadorian President Rafael Correa - in English This English translation of the interview was published in Fight Racism! Fight Imperialism! No. 212, December 2009/January 2010: INTERVIEW WITH PRESIDENT RAFAEL CORREA Building socialism for the 21st century in Ecuador

In April 2009, Rafael Correa was elected to his second term as President of Ecuador with 51% of the vote. This gave him a mandate to continue and deepen the programme of reforms and structural changes initiated since he first became president in November 2006. In three years Correa's government has introduced an unprecedented social and economic programme of reforms -- the Citizens' Revolution -- to reverse the poverty and exploitation suffered by the majority of the population in a country which has been ravaged by neo-liberalism (see FRFI 210). Correa has announced that Ecuador is building socialism for the 21st century and joined the Bolivarian Alliance for the Americas (ALBA). In late October 2009, he made a brief trip to London, speaking at universities and to over 1,000 Ecuadorians living and working in London, en route to a formal state visit to Russia. HELEN YAFFE had the privilege of interviewing President Correa during a boat trip on the River Thames and a translation appears here.

Helen Yaffe: In what way is ALBA distinct from previous attempts by Latin American countries to develop mutually beneficial trade and investment strategies? Rafael Correa: In every way because it is integration based on fraternal solidarity, not between competitors, which has been the great mistake in the past. The integration that we have sought, above all in recent years, has been orientated towards trade, to having larger markets and competing between us. In ALBA we don't talk about competition, we speak of coordination in energy, finances and even in defence, but coordination, not competition.

HY: In 1965, Che Guevara said, "there should be no more talk about developing mutually beneficial trade based on prices imposed on the backward countries by the law of value and the international relations of unequal exchange that result from the law of value"

We have to prepare conditions so that our brethren can directly and consciously take the path of the complete abolition of exploitation"' How does ALBA trade and the formation of supra-national companies achieve this - constraining commercial exchanges based on profit - particularly given that, with the exception of Cuba, the means of production in the ALBA states are predominantly in private hands? RC: The question of value is perhaps the most difficult and complex economic problem. It is clearly very difficult to remove the question of monetary prices when large parts of the means of production are in private hands. But with ALBA we are experimenting with other forms of exchange, not necessarily based on market prices but on mutual compensation, collaboration and bi-national enterprises. For example, since the beginning of my government I have sent crude oil [to Venezuela] and they refine it and charge me the cost.

So, Che was right, and you are right, it is difficult to remove the law of value, basically monetary prices imposed by the market, when the means of production are in private hands and are guided by the logic of capitalism, the logic of profit. But at the level of countries something can and is being done. For example, Chavez has a lot of experience with petrol in the area of the Caribbean where he gives petrol without considering the market prices but considering the costs and the need for help and other circumstances. We are doing a lot of this. We are seeking food sovereignty and sovereignty in health, producing our own medicines, guiding ourselves by planning and coordination, without competition and without this relationship to the market. Let me state something clearly, Marxism has not overcome this question of value either. It is very difficult. Sometimes you can remove monetary prices set by the market, other times you cannot. You have to try to prevent speculation and the power of the market. There is the problem of what value is, and the problem of utility also -- the markets try to respond through supply and demand. Supply expresses the costs of production and the social costs of producing; demand expresses preferences, the usefulness to the consumer, but in practice with an unequal distribution of income, price represents anything, not the intensity of preference. So the problem is there and no-one has been able to convincingly solve it. In its trade the Soviet Union also used money prices, not necessarily set by the market, but not compensations based on equivalent values either. There are alternative proposals, like the one for equivalent values presented by Heinz Dietrich who works on socialism for the 21st century, but all these alternatives are insufficient and inapplicable. HY: This term "socialism for the 21st century' is sometimes used as a way of rejecting all the antecedents, all previous struggles" RC: There are things which should be superseded -- I have spoken with Raul and Fidel about Cuba -- for example, state ownership of all the means of production. Of course there should be a certain space for private property and obviously the strategic sectors, certain areas which are fundamental for food sovereignty and so on, should be controlled by the state. But in the 21st century, it is difficult to sustain state ownership of all the means of production.

HY: It is also difficult if you permit small private production. What controls are there to prevent the accumulation of capital or speculation? RC: This is easier than directly managing everything.

HY: Announcing the Plan for Land Distribution, Ecuador's Minister of Agriculture said that the land was "not considered to be a commodity, but for its social function, as a means of production, a place for settlement and a way of living'. RC: This is important. There are things which are not commodities -- the earth, water -- that have to be under state control -- their exchange has to be controlled. We are introducing a law where the state has to authorise the sale and purchase of land to avoid what has occurred in the past -- peasants cheated and left without land. But the land is going to be theirs and the communes'; it is not going to belong to the state. Under control of the state -- that's another matter.

HY: It is similar to the new campaign in Cuba to distribute lands in usufruct. They have to produce, if they don't produce, the land will be taken back. RC: Yes. We are also going to distribute 130,000 hectares of state land and we are drawing up an inventory of all the unproductive private lands to distribute -- around one and a half million hectares. This is why they are desperate to destabilise us so quickly.

HY: Che Guevara believed in using the technological advances and managerial methods of capitalism but with different social objectives" You were trained in economics in the US and you have spoken about the poor quality of university education in Ecuador. How does your government plan to train skilled workers, while at the same time forging a political commitment to social development and the Citizens' Revolution? RC: What Che did was common sense. Technology cannot be the patrimony of capitalism - there is no capitalist technology, just technology. Of course it uses the human resources formed by capitalism. The Cuban Revolution benefited from the human resources formed by the Soviet Union, China and so on. For the development of our countries we have to emphasise technology and this is linked to human resources. We are not referring to having technology without the human resources capable of using and generalising it, so we are introducing major reforms in education that have generated resistance from the groups which have always appropriated the education system.

Public education in Ecuador is very bad, we need to make a huge effort to improve it and higher education is also terribly bad. We have a new law which, among other things, obliges universities to carry out research. At present, half of the universities don't spend 20 centavos on research. Their argument is that resources are scarce. But there is Cuba, with few resources, carrying out research. Resources are always going to be scarce, but these universities have invested in expensive extensions instead of funding research. We have strong programmes to improve education, the law of higher education, scholarship programmes, to train people in other countries, and clear policies to invest in science and technology despite the scare resources. The development of revolutionary consciousness and commitment depends on various factors. I believe that part of this education is about social commitment, without it being partisan. I also believe that when leaders are seen to have enthusiasm and a real desire to change the country, people support this desire for change. The future professionals, who will be trained because of this change, are going to have this revolutionary consciousness. With this dynamic period Ecuadorian society is living through - along with the opportunities that we are creating -- we believe that all these new professionals who are receiving scholarships, who go abroad to train, will develop this revolutionary consciousness. But you are probably right that we have to work more directly on this. We are already training people, but what you said about revolutionary consciousness is more difficult to achieve. We have political education schools, but we lack structure in the Movimiento PaÃ­s [the political organisation which Correa heads], we lack consolidation and this is perhaps the great challenge that we face. HY: The next question is about the SUCRE -- how will it function? RC: It is very easy, we are going to start pilot operations to test it. It is a system of compensation. It is for commercial or private trade. It will not be pegged to the dollar. We are going to create an electronic currency and we won't have to use any [US] dollars.

HY: If the aim of the SUCRE is to replace the dollar in trade between ALBA countries, is the goal eventually to replace the dollar as the national currency of Ecuador? RC: No. We are minimising the need for dollars. Unfortunately, Ecuador adopted the dollar as the national currency [in 2000]. It is very difficult to undo dollarisation; it could create a total social cataclysm.

HY: How can the ALBA countries defend themselves against the kind of reaction seen with the coup in Honduras? RC: Well, there is no infallible defence, but, for example, Telesur is a great assistance -- in providing information -- imagine, before that the news came from CNN -- as is having strong relations between countries for mutual support. But there is nothing that guarantees that this cannot happen in Ecuador, in Venezuela, in Bolivia. We must be very well organised. You know that our governments have great popular support, but we are not organised to defend our process from any intent at destabilisation. They tried to do this in Ecuador a few days ago and unfortunately indigenous people and teachers collaborated. A small group of teachers called a totally unjustified indigenous uprising and the right wing began a campaign in their newspapers claiming that the popularity and credibility of the president had fallen. They are also preparing mobilisations in Guayaquil. They had everything ready when we managed to resolve the problems, but perhaps not next time. Basically every country has to organise its internal structures.

HY: Recently you spoke about socialism for the 21st century in Ecuador combining elements of "classical socialism', the socialism of Mariategui and liberation theology, and socialism based on Ecuadorian conditions. Can you expand on these concepts? RC: Socialism for the 21st century is a process of construction which tries to take the best of traditional socialism, but also of other socialisms that have existed, like Andean socialism, agrarian socialism and also, at least in Ecuador, you note the social doctrine of the church, liberation theology. We are a Christian continent. In Cuba, they declared the state to be atheist when the people were believers. This created big conflicts and impeded, perhaps pointlessly, significant support because there were many Catholics committed to the Revolution. They recognised the mistake and rectified it decades ago. A much better and legitimate strategy is to guide religion to be revolutionary also. This is what liberation theology did. Basically the message was "enough with this theology that tells us to endure exploitation in life because after death you are going to have the Kingdom of Heaven'. No, the Kingdom of Heaven must be made here -- it is the kingdom of justice. You have to struggle against injustice. 21st century socialism is based on this search for social justice, and it coincides with the social doctrine and liberation theology. This project can be joined by atheists, practising Catholics -- because I am a practising Catholic. It doesn't contradict my faith which, on the contrary, reinforces the search for social justice.

Socialism for the 21st century seeks this change through democratic processes and the vote, we have became accustomed to this in Latin America, it is no longer through armed struggle. There are things in traditional socialism which we agree with; the primacy of human labour above capital, the need for collective action, the need for planning, the role of the state in the economy, the search for justice in all its dimensions, social justice, gender justice, ethnic justice, international justice. But we are obliged to reject some elements of traditional socialism which are not feasible or desirable; class struggle, violent change and dialectical materialism itself. This will grate with you as a Marxist, but any attempt to explain processes as complex as the advance of human society with simple or simplistic laws will fail. Just as it is simplistic to say that the motor for the advance of society is individualism, abstracted from culture, the community, etc, it is also a simplification to say that it is class struggle, the opposition of forces within the productive system. A technological revolution can create more social changes in the revolutions in production than by supposed dialectical materialism, the conflict between oppositional forces. Not only this, dialectics takes as an infallible law thesis, anti-thesis and a synthesis which emerges and is better than what you began with. It doesn't have to be that way. You can have a thesis that is true, you present an antithesis that is erroneous, and the synthesis can be worse than the thesis. This is the reality we have lived in Latin America. We propose something that is correct, we are told some nonsense in the name of democracy, of dialogue, and we have united the two proposals and produced a synthesis, but the synthesis is worse than what we had before. We have to improve all these things, it is necessary to be objective, it is not necessary to be romantic. HY: Doesn't what happened in Honduras, or before that in Venezuela, demonstrate the importance of class struggle? RC: We completely agree that the great challenge in our countries is to change the relation of forces and pass from a state which is captured by certain powers to a state that represents popular power. This is the first step in Latin America, but to go from that to believing that this change in the relation of forces will resolve everything is a mistake in my view. There are many important things to consider. The technological base, cultural changes; also be careful about how you identify the poor. The poor have many values, but they often make mistakes. It is not certain that the masses, the proletariat, are always right. You can convert a bourgeois state into a popular state, but that does not mean that it is going to take all the right decisions. For example, Latin America has to make huge cultural changes. Among the indigenous people, who are so mythologised, is where there is most interfamilial violence, but these things are not spoken about. So the point is not only about transforming the structures, it is also about transforming the family, people, transforming culture, transforming technology. There are many factors which generate social advance. It is a very complex process. This is a difference. We do not reject dialectical materialism, but neither do we accept that the idea that it is fundamental for us, as the motor for society, producing class struggle which means violent changes.

Perhaps the greatest error that traditional socialism made was in not disputing the notion of development proposed by capitalism. They sought the same, via a faster and supposedly more just route, but the same, in the Soviet Union - industrialisation, mass consumption, accumulation -- this was a mistake. It is impossible to generalise the western development model. If all the Chinese people achieved the standard of living of people here in London, the world would explode. Traditional socialism never presented an alternative notion of development. Today we are presenting this alternative. HY: To what extent can we say that the welfare-based development model of socialist Cuba, and its global status achieved through its internationalist health and education programmes, was the inspiration to ALBA. RC: Cuba has great things and obviously ALBA was started by Chavez and Fidel. A great example provided by Cuba is that in its poverty it has known how to share, with all its international programmes. Cuba is the country with the greatest cooperation in relation to its gross domestic product and it is an example for all of us. This doesn't mean that Cuba doesn't have big problems, but it is also certain that it is impossible to judge the success or failure of the Cuban model without considering the [US] blockade, a blockade that has lasted for 50 years. Ecuador wouldn't survive for five months with that blockade. Of course ALBA is largely inspired by the good things of the Cuban model, like solidarity, trade between peoples based on solidarity, not for profit, cooperation for development. Of course ALBA is inspired by the successes of the Cuban model. Posted at 11:57 PM | Permalink | Comments (0) | TrackBack (0)

Rafael Correa President of Ecuador in London - with me!

On Wednesday 28 October, I had the privilege of interviewing the President of Ecuador, Rafael Correa, who was in London for an academic trip stopping over on the way for an official visit to Russia. On Monday and Tuesday the president had spoken at Oxford University, Chatham House, the London School of Economics and at the TUC's Congress House to a vibrant audience of over a thousand Ecuadorians and other Latin Americans in London. On Wednesday the president went to Parliament, before I joined him, with my colleague Ethesham who filmed the interview, for a tour of Westminster Cathedral, followed by a boat trip down the River Thames from the London Eye to London Bridge and then lunch by the river where we eat fish and chips in a smart French restaurant. The focus on my interview was on the Bolivarian Alliance for the Americas (ALBA), a trade and cooperation agreement between nine countries in Latin American and the Caribbean and which Ecuador joined earlier this year. Specifically, we discussed how ALBA proposed to deal with the problems which Che Guevara had outlined about undermining the operation of the law of value, domestically and in foreign trade between fraternal, socialist and underdevelopment countries, to promote trade based on cooperation, not competition. Che Guevara's response to this and associated problems, which remain pertinent today, are the focus of my book. As an economist trained in the US, as well as leading a revolutionary process in Ecuador, Correa has a good insight into these challenges. We also talked about the SUCRE, a new virtual currency for exchanges between countries in ALBA which will be launched in early 2010, and about several developments and challenges in the revolutionary process in Ecuador, including the plan to redistribute idle state and private lands to poor people and the problem of raising the technological and educational level of the population, simultaneously with their commitment to social development. I have written up part of the interview for Prensa Latina, and another colleague has offered to edit the interview to make it part of it available over the internet. For now, here are a few photos of myself with President Correa, at the event with Ecuadorians and with a copy of my book which he is keen to read! Since the last entry of this blog I have written various articles about Cuba and ALBA, including: "Cuba: Strides Towards Sustainability' for Resurgence Magazine to be published in January 2010. "Cuban Development: an inspiration for ALBA' for the Journal of Iberian and Latin American Research, due for publication in January 2010

"Cuban Socialism: To be educated is to be free', article co-written with Rebecca Rensten and published in the September/October issue of Fight Racism! Fight Imperialism! A review of Simon Reid-Henry's book Fidel & Che: A Revolutionary Friendship, for the Camden New Journal In addition I have done interviews for Radio France Interview and George Galloway's show on Press TV, Real Deal, as well as speaking at book launches and conferences in Glasgow, Manchester, Nottingham and London. I guess I am excusing myself for the infrequent updates on this blog" I will reinforce my efforts to write regular updates...

Posted at 10:59 PM 06/23/2009

Here is a short piece I wrote for the website of Red Pepper:

Che Guevara: The Economics of Revolution Helen Yaffe explores impact of Che Guevara as an economist and politician In my first A-level economics class, at the age of 16, I was taught these guiding principles; people only produce if they can make a profit, humans have infinite desires, while resources are limited, so everything must be rationed through the price mechanism -- demand and supply.

No concept of production for need or socialist economics appeared on the curriculum. This was the early 1990s, the socialist bloc had collapsed and neo-liberalism was triumphant, or so we were told. Over the previous ten years, British Telecoms, the British water industry, British Rail, British Gas and British Coal had been packaged up and sold off to corporations and share holders.

Rational economic man, it was said, would ensure efficiency through privatisation and competition, even while, in the following years, prices rose and accidents increased in these fundamental services of the economy. Darwinism was recruited to the cause, as underdeveloped countries were forced to "liberalise' their economies, selling their natural resources to foreign investors, rolling back the state, and removing obstacles to the "revolutionising' power of market forces. In Latin America, the "lost decade' of the 1980s and the "Washington Consensus' of the 1990s saw debt crisis, restructuring and liberalisation plunge millions more into destitution, with or without inflated GDP statistics.

Amidst this neoliberal onslaught, Cuba stood almost alone. The collapse of the socialist bloc countries between 1989 and 1991 cut off 80 per cent of Cuba's trade, GDP plummeted by 35 per cent and food shortages decreased caloric intake by nearly 40 per cent. The crisis was exacerbated by punitive laws tightening the US blockade in 1990, 1992, and 1996. Despite entering a "special period in time of peace', the Cuban revolution did not renege on political commitments to socialist welfare, state planning and the predominance of state property, even while forced to introduce pragmatic reforms -- limited concessions to market forces -- to stimulate the economy and get vital goods to the people.

Following my A-levels, in the mid-1990s, I lived in Cuba with my sister -- an austere time during the 'Special Period'. Cubans dug deep to find what they needed to survive, as individuals and as a socialist society. In December 1995, we participated in the first solidarity brigade of the campaign from Britain, Rock around the Blockade, staying in an agricultural camp where hundreds of young Cubans had volunteered to labour in the fields, conscious that the revolution's future depended on the population's ability to feed itself. This was my first glimpse of the important relationship between consciousness and production, which lies at the heart of the economics of revolution.

Like anyone who has visited Cuba, I felt the omnipresence of Che Guevara on the island. What became clear, however, that Cubans recognised a more multifaceted individual than the one caricatured outside the island; the romantic guerrilla fighter with idealistic notions of how human beings are motivated and how social change is brought about. In the mid-1980s Cuba had pulled back from the Soviet model of socialism, entering a period known as "Rectification'. This involved an overt return to the ideas, approach and symbolism of Che. Two Cuban academics, Fernando Hernandez Heredia and Carlos Tablada, published seminal works providing the theoretical basis for this move -- linking Che's promotion of voluntary labour and consciousness to his Marxist analysis of capitalism and his critique of the Soviet system which had relied on capitalist tools to build socialism.

Che was not alone in the 1960s in criticising the USSR for neglecting questions of consciousness and failing to put human beings at the centre of development -- many Marxist intellectuals in Western Europe and the US had done the same. Having seized state power, however, the Cuban revolutionary leaders moved beyond the critique to the task of transformation. Che faced the challenge of demonstrating that there was an alternative approach -- the possibility of carrying out the transition to socialism in an underdeveloped country, without relying on capitalist mechanisms (the law of value, the profit motive, competition, material incentives, and all those A-Level principles). What practical policies could be implemented to transform the consciousness of individuals and put the working class in control, whilst increasing the wealth of the country?

My historian's curiosity was stirred. Hardly any information about Che's practical work as a member of the Cuban government between 1959 and 1965 was available. Che had created a system of economic management which was unique to socialism - the budgetary finance system; but what did that involve and how was it different? I set out to Cuba to find out.

This book is the result of six years of research, analysis, writing and editing. My investigations uncovered new archival material, including the internal transcripts of the bimonthly meetings in the Ministry of Industry headed by Che from 1961 and his critical notes on the Soviet Manual of Political Economy, predicting the return of capitalism to the socialist bloc; a document so controversial that it was kept under lock and key for 40 years. I met and interviewed fifty of Che's closest colleagues and compaÃ±eros, some of whom had never spoken formally about their experiences of working at Che's side while he served as President of the National Bank, head of the Department of Industrialisation and Minister of Industries between 1959-1965.

The early 1960s in Cuba was a period of turmoil and transition; nationalisations, the shift in trade to the socialist bloc, the introduction of planning, the exodus of professionals, the imposition of the US blockade, attack, sabotage and the threat of nuclear conflagration. Yet under Che's leadership, Cuban industry stabilised, diversified and grew -- testimony to his capacity for economic analysis, structural organisation and the mobilisation of resources, both human and material. His approach was based on his study of Marx's analysis of the capitalist mode of production, his engagement with socialist political economy debates and his recourse to the managerial and technological advances of capitalist corporations. Che's promotion of voluntary labour and his emphasis on consciousness were not idealism but part of the search for ways to undermine the law of value, moving away from capitalist mechanisms in the construction of socialism.

As Minister of Industries, Che set up nine research and development institutes, studying everything from the mechanisation of the sugar harvest and a sugar derivatives industry, nickel production, green medicine, oil exploration, the chemical industry, to computing and electronics (at a time when there was just one computer on the island -- a betting machine for the greyhound races). He integrated psychology as a management tool, secretly organised the printing of new banknotes, devised a new salary scale, promoted workers' management, inventions and innovations. In six tumultuous years, Che made an indelible contribution to Cuban development.

There have been few more poignant moments in history to talk about the economics of revolution. 2009 is the 50th anniversary of the Cuban revolution -- contradictions and challenges persist, but the Revolution remains vibrant. We see the growing radicalisation of social movements and governments in Latin America and the consolidation of the Bolivarian Alternative for the Americas (ALBA) trade and cooperation agreements between them. This is also a period of acute crisis for the global capitalist system.

In late September 2008, George W Bush, perhaps the US's most neoliberal, anti-regulation, aggressively imperialist frontman in history declared: "The market is not functioning properly.' Bankers, entrepreneurs, and moneyspinners, went from being hailed as the good guys who kept the economy dynamic, to facing public opprobrium and shareholder rage over the bonus systems which rewarded incompetence and greed.

Bush's successor, Barack Obama, has poured enormous sums of money into the US economy, propping up failing banks and financial services, car manufacturers and the housing sector. Rational economic man has given way to an unprecedented level of state intervention in a desperate attempt to save the capitalist system -- well beyond the state subsidiaries so mocked and criticised in the socialist countries by neoliberal commentators.

Huge companies like General Motors are going bankrupt, not because they are technologically stagnant or unproductive, but because of the restraints imposed by capitalism's financial mechanisms and the crisis of profitability. Workers, skilled and manual, are being made redundant. Hundreds of US citizens join tent cities scattered around the capitals of highly industrialised US states, not because there are insufficient houses, but because families are thrown onto the street when they can't afford to pay rent and mortgages. Where is the rationality in any of this? In London, at the G20 in April, Obama and Prime Minister Brown recognised the end of the Washington Consensus. After years of rolling back the state, governments around the world are now impelled to intervene.

Guevara was right to recognise the technological advances of the capitalist corporations and aspire to their high productivity and efficiency. But he was also correct in the view that state planning and centralised budgets are the only rational way to organise the economy; with production for people's need, not for financial profit. In rescuing Guevara's work as a member of the Cuban government, this book hopes to place his economic ideas firmly on the table for consideration in the search for alternatives to the bitter legacy and human suffering of collapsing market economies.

"CHE GUEVARA: The Economics of Revolution" Book by Helen Yaffe and Review by Diana Raby This review was published in the newspaper Fight Racism! Fight Imperialism! No. 209 (June/July 2009).Copied from the website: Haiti Cuba Venezuelan analysis website A MASTER CLASS IN SOCIALIST ECONOMICS

Helen Yaffe has produced a very important book which can only be described as essential reading for all socialists. Ernesto "Che" Guevara has been justly admired, indeed romanticised and even idolised, for his heroic role as revolutionary guerrilla fighter, his personal integrity and self-sacrifice culminating in martyrdom. But a vital period of his short life has been inexplicably neglected in previous accounts: the six years in which he served the Cuban revolutionary government, playing a crucial role in the transition to socialism.

As President of the National Bank, head of the Department of Industrialisation and then Minister of Industry, Guevara was responsible for many of the fundamental decisions in creating a distinctive Cuban model. Despite the importance of Soviet support in providing a lifeline to the young revolution, Che quickly made clear his reservations with regard to economic policies in the USSR.

Che's criticisms gave rise to a public polemic which came to be known as the "Great Debate", and several of the key contributions to this discussion were published in a useful volume edited by Bertram Silverman (Man and Socialism in Cuba: The Great Debate, New York: Atheneum, 1971). But we have had to wait until Yaffe's book for a detailed analysis of Guevara's arguments and of actual policies.

On the basis of 60 interviews with Che's former colleagues and extensive archival research, including consultation of Guevara's crucial notes for a critique of the Soviet Manual of Political Economy, Yaffe gives us unprecedented insight into his vital contribution to the Cuban Revolution and to Marxist theory.

The Law of Value under Socialism

The central issue at stake was the role of the Law of Value under socialism. Ever since Lenin, Communists had recognised that this key component of capitalist economics would not simply disappear overnight and could not be legislated out of existence; in the USSR in the early 1920s, Lenin's New Economic Policy (NEP) was an explicit tactical retreat which authorised extensive use of capitalist practices and hence the Law of Value. Although Stalinist collectivisation appeared to eliminate or greatly restrict its operation, in fact it continued and after Khruschev's reforms in the late 1950s, the Law of Value was once again explicitly enshrined in Soviet economic manuals.

To Guevara, Soviet technological backwardness was a symptom of the stifling of socialist creative potential by trying to combine socialist planning at national level with capitalist management systems at enterprise level. In technical terms, the key issue was the use of the Auto-Financing System (AFS), promoted in Soviet manuals from the 1950s onwards, as against the Budgetary Finance System (BFS) favoured by Guevara. The AFS encouraged enterprise managers to maximise profits by using market mechanisms to determine prices, financing their own investments through credit and developing autonomous commercial relationships with other public enterprises with little regard for the national plan.

In contrast to this, under the BFS goods exchanged between public enterprises were transferred without payment; a cost price was administratively determined and the relevant adjustments were made in the respective enterprise accounts in the Treasury. Incentives were based on micro-management of costs and production contracts (determined by management consultations at all levels, with direct worker input) regulating quantity, quality and punctuality.

Che's argument for the BFS was that under socialism, the entire Cuban economy was essentially one big public enterprise, and therefore exchanges of products within it were not commodity transactions; there was no transfer of ownership and therefore no purchase or sale. Costs had to be recorded to prevent waste, but incentives for increased quantity or quality of production should be based on the collective interest and not market forces.

This principle of socialist exchange, in which the Law of Value does not operate, could not be applied to foreign trade with capitalist countries, where imports were necessarily priced according to the Law of Value. It followed that goods produced in Cuba with imported inputs (raw materials or machinery) would have to reflect the Law of Value in their pricing. Indeed, one of Che's major criticisms of the Soviet Bloc was the extent to which they applied capitalist market prices in their international trade.

The transformation of Cuba

It is fascinating to see how Guevara applied these abstract principles in practice to the management of the Cuban economy, at the same time that he was wrestling with all kinds of mundane practical problems. The nationalisation of virtually all large-scale enterprises in only two or three years, together with the sudden loss of Cuba's traditional commercial ties to the US and the need to replace American with Soviet technology, threatened to bring about complete economic paralysis.

What Helen Yaffe's book shows in this respect is how Che's extraordinary revolutionary dedication enabled him to deal with this daunting situation. While her discussion of the BFS refutes the widely-held myth of Guevara as a pure voluntarist and idealist, her account of his practical administrative work shows how his personal will and commitment drove him to find solutions to apparently insoluble problems.

Yaffe gives amusing examples of the improvisation and spontaneity which characterised the revolution in its early years, such as Che's appointment as President of the National Bank despite having no economic training or experience and his decision to appoint his math lecturer, Salvador Vilaseca (who was equally inexperienced) as his deputy; and the appointment of 200 teacher trainees, aged 15-20, as managers of nationalised enterprises.

These examples confirm the tendency to improvisation and spontaneity which characterised the revolution in its early years, and while such rash decisions sometimes had disastrous consequences, it is remarkable how often these young and inexperienced revolutionaries succeeded in their new tasks. The reason for this almost certainly lies in the dedication which Guevara (and Fidel and many of their associates) brought to everything they did, and the practice of giving real decision-making power to shop-floor workers.

Study and scientific rigour

The myth of Che as impractical idealist is further undermined by his respect for science and his quest to apply the most advanced scientific knowledge in all spheres. Whenever he assumed a new responsibility, he immediately began to study the relevant scientific disciplines, systematically and intensively -- and he insisted on his subordinates doing the same.

This combination of dedication, theoretical rigour and attention to practical detail also characterised Che's approach to issues of workers' participation and socialist consciousness. His insistence on the crucial importance of developing consciousness -- the "New Man" -- was not just a matter of propaganda and exhortation. All kinds of mechanisms were introduced to promote workers' initiative and participation: Committees for Spare Parts, the Movement of Inventors and Innovators, Advisory Technical Committees, Production Assemblies and Committees for Local Industry. Most important, the human side of workers' involvement was a central concern.

Thus the encouragement of voluntary labour and moral (as opposed to material) incentives was accompanied by measures which showed a growing understanding of workers' practical problems. Health and safety were recognised as important issues, and "burnt-out" workers were given entitlement to rest and recuperation in holiday resorts. Guevara's medical training made him sensitive to workers' problems of stress and self-esteem, and of psychological issues in general; and he was forced (with some difficulty) to recognise the problematic impact of his own explosive character.

The Critique of the Soviet Manual

Guevara's contribution to socialist theory is summed up in an incomplete study which he was working on in 1965-66, before leaving for Bolivia. These notes, which amount to a comprehensive critique of the Soviet Manual of Political Economy, and which were so contentious that for 40 years they were kept under lock and key by Che's deputy Orlando Borrego DÃ­az, are analysed in Yaffe's chapter 9.

Guevara's ideas are certainly controversial, and a breath of fresh air for anyone familiar with the fossilised formulae of "orthodox" Communist (and in many cases also, Trotskyist) exegesis. He argued that in the USSR the NEP (which Lenin would surely have abandoned had he lived longer) had entrenched the structures of pre-monopoly capitalism, but centralised planning had prevented competition (and the Law of Value) from operating freely. The result was the worst of both worlds: technological stagnation and a situation in which "man neither develops his fabulous productive capacities, nor does he develop himself as the conscious builder of a new society". Stalinist dogmatism had frozen the system but had since been replaced by inconsistent pragmatism, which in turn would lead more and more towards capitalist restoration, pure and simple.

But Guevara's criticisms went far beyond this. He also rejected the Soviet Manual's acceptance of the idea of a peaceful, parliamentary road to socialism in some countries; condemned the working class in imperialist countries as accomplices of the system; identified landless peasants as the truly revolutionary force in most countries; and condemned the USSR for replacing internationalism with chauvinism, forcing other socialist countries into submission.

Che's Legacy

Yaffe recognises that Che's ideas have not been fully applied in Cuba since his departure and death, but neither have they been simply abandoned. Rather, she argues, the country's subsequent history "can be portrayed as a pendulum swinging between what is desirable and what is necessary -- with Guevara's ideas being associated with the vitality of the Revolution". She also correctly draws attention to the importance of the new relationship with Venezuela and the ALBA, in which international exchanges take place on a non-commodity basis. She quotes favourable comments by Hugo ChÃ¡vez on Che's ideas and the adoption by the United Socialist Party of Venezuela of "the strategic objective of neutralising the operation of the law of value".

What this book has achieved, then, is to demonstrate that Guevara's greatness lies at least as much in his contribution to socialist thought as in his heroic example as a guerrilla leader. This does not mean, of course, that his ideas should be accepted uncritically; indeed that would itself be totally un-Guevarist. In the humble opinion of this reviewer, two questions immediately arise. First, if the BFS is a desirable mechanism for avoiding the operation of the Law of Value at enterprise level, does it not create an enormous danger of bureaucratic centralism stifling workers' democracy and initiative? And secondly, while it may be desirable to view the entire economy of a socialist country as one single enterprise owned collectively by the working people as a whole, does this not pose a serious problem of the potential disparity between ideal and real possession of the means of production: i.e., workers may well feel that they are the owners of their particular workplace, but do they really feel -- and do the objective conditions exist for them to function as -- owners of the entire economy?

One thing is certain: for anyone engaged in the struggle for a better world, the thought of Che Guevara is a fundamental point of departure, and this book is an essential work of reference.

Thanks to brigadistas from Rock around the Blockade who, in early May, took a copy to the Che Guevara Study Centre in Havana, which is directed by her mother, Aleida March - another great revolutionary.

As stated in the acknowledgements, the Che Guevara Study Centre gave me vital support during the research carried out for this book, offering me access to important archives which provided much of the original material. http://palgrave.typepad.com/yaffe/

In today's world, the goals of a committed anarchist should be to defend some state institutions from the attack against them, while trying at the same time to pry them open to more meaningful public participation— and ultimately, to dismantle them in a much more free society, if the appropriate circumstances can be achieved.Noam Chomsky